NEW DELHI: India has allocated 50 billion rupees (US$0.61 billion) for purchases of crude oil for its national strategic reserves.

This was stated by Indian Finance Minister Nirmala Sitharaman in Parliament while presenting the government’s annual budget today.

India’s strategic petroleum reserves are mostly made up of crude from the Abu Dhabi National Oil Company (ADNOC) under an agreement between ADNOC and the Indian Strategic Petroleum Reserves Ltd (ISPRL) signed in January 2017. The ISPRL is an Indian government-owned company mandated to store crude oil for the country’s emergency needs.

The first consignment of crude under this agreement was shipped from Abu Dhabi in May 2018 bound for the South Indian port city of Mangalore. Subsequently, several shipments for ISPRL facilities have been ongoing between the two sides.

Sitharaman’s announcement in her budget speech will mean more such transactions under the agreement. In November 2021, India released 5 million barrels of oil from its strategic reserves under a coordinated programme with four other major oil consuming countries to meet global needs.

With preparations under way for the 28th session of the Conference of the Parties (COP 28), the next climate change conference to be held in the UAE, the Indian budget today allocated 300 billion rupees (US$3.66 billion) to government-owned oil refining companies to move towards clean energy. India has set a target of net-zero carbon emission by 2070.

“This budget builds on our focus on green growth,” the Indian Minister said. She placed enhanced emphasis on the energy sector in the latest national budget.

India’s government-owned oil companies will be enabled in the budget to implement a 27 percent growth in spending from April. India’s fiscal year begins on 1st April.

These companies have been allocated 1.06 trillion rupees (US$12.95 billion) to expand their refining and fuel retailing capacities in the budget. India is the world's third-largest importer and consumer of oil.